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2013 DIGILAW 548 (RAJ)

Nath Rai v. Kalyan Sahai Dangachayach

2013-03-07

BELA M.TRIVEDI

body2013
JUDGMENT : Bela M. Trivedi, J. The present appeal has been filed by the appellants-plaintiffs under Section 96 of CPC challenging the judgment & decree dated 19.08.1992 passed by the Additional District & Sessions Judge, Court No. 3, Jaipur City, Jaipur (hereinafter referred to as "the trial court") in Civil Suit No. 17/81, whereby the trial court has dismissed the suit of the appellants-plaintiffs seeking redemption of the mortgage in respect of the suit property. 2. The case of the appellants-plaintiffs in nutshell before the trial court was that the plaintiffs were the grandsons of Smt. Chandra Kunwar Devi who had expired on 13.11.1971, after executing the will on 06.10.1971. By virtue of the said will, the plaintiffs had become the owners of the properties belonging to the said Smt. Chandra Kunwar Devi, including the plot bearing No. D/54 Madhosingh Road, Bani Park, Jaipur. It was further case of the plaintiffs that the said Smt. Chandra Kunwar Devi was in need of money, and therefore had executed a document on 09.12.1966 in favour of the respondent-defendant, creating a mortgage by conditional sale in respect of half of the plot (southern portion) comprising 1250 square yards with construction, of the plot D/54, for Rs. 36,000/-. The said deed of conveyance dated 09.12.1966 contained the conditions of re-conveyance and duration to the effect that said Smt. Chandra Kunwar Devi could repurchase the said property if she desired to do so, within a period of two and a half years for Rs. 36,000/-. According to the plaintiffs, the value of disputed property at the relevant time was Rs. 75,000/-, however the said sale was effected with the consideration of Rs. 36,000/- only, and the title deeds of the said property were also not handed over to the defendant. The name of the defendant was also not recorded as the owner in the House Tax Department and other Departments of Government. The appellants-plaintiffs had further alleged that they had served legal notice dated 21.10.1980 on the respondent-defendant calling upon him to redeem the mortgage, however the defendant having failed to give any reply to the same, the suit was filed. 3. The appellants-plaintiffs had further alleged that they had served legal notice dated 21.10.1980 on the respondent-defendant calling upon him to redeem the mortgage, however the defendant having failed to give any reply to the same, the suit was filed. 3. The respondent-defendant had resisted the suit by filing the written statement denying the allegations made by the appellants in the plaint and further contending inter alia that the will dated 06.10.1971 allegedly executed by late Smt. Chandra Kunwar Devi in favour of the plaintiffs was a forged will, and therefore the plaintiffs did not have any right to file the suit. It was further contended that the document dated 09.12.1966 was the deed of sale and not the deed of mortgage by conditional sale as alleged by the plaintiffs. It was also contended that the defendant had got actual possession of one hall situated in the plot in question from Smt. Chandra Kunwar Devi on the date of execution of the said sale deed, however the defendant had got symbolic possession of the rest of the property, as the same was in occupation of three tenants and one another portion was in possession of the mortgagee Shugan Kanwar, with whom Smt. Chandra Kunwar Devi had mortgaged the said portion. According to the defendant the possession of the rented premises from the respective tenants was already recovered from them by filing suits against them and the possession of the mortgaged portion was also recovered from Smt. Shugan Kanwar by the defendant, by filing a suit for possession against the said Shugan Kanwar and Chandra Kunwar Devi. According to the defendant, the said suit was filed by the defendant in the capacity of the owner of the suit property and the same was also decreed against the said two defendants, however Smt. Chandra Kunwar Devi had not chosen to challenge the same, and therefore the present suit being barred by principles of res judicata was also not maintainable. 4. The appellants-plaintiffs had examined as many as five witnesses and the respondent-defendant had examined two witnesses before the trial court. Both the parties had also produced the documentary evidence in support of their respective contentions raised in the suit. The trial court after appreciating the evidence on record dismissed the suit of the appellants-plaintiffs, being aggrieved by which, the present appeal has been filed. 5. The learned Senior Counsel Mr. Both the parties had also produced the documentary evidence in support of their respective contentions raised in the suit. The trial court after appreciating the evidence on record dismissed the suit of the appellants-plaintiffs, being aggrieved by which, the present appeal has been filed. 5. The learned Senior Counsel Mr. S.K. Tiwari for the appellants vehemently submitted that the trial court had mis-appreciated the evidence on record, more particularly the document Exhibit-2 by treating the same as the sale deed and not the deed of mortgage by conditional sale. Taking the Court to the said document, the learned counsel submitted that there were number of stipulations including the stipulation of right of Smt. Chandra Kunwar Devi to repurchase the suit property within two and half years for the same sale consideration of Rs. 36,000/-. Hence, according to Mr. Tiwari, the parties intended to create a mortgage by conditional sale and not the absolute sale. Referring to the provisions contained in Section 54 of Transfer of Property Act, he submitted that the sale was not complete as the respondent was not delivered the possession of the property mentioned in the said document. Relying upon the provisions contained in Section 58(c), he submitted that since there was a condition entitling the seller, i.e. Smt. Chandra Kunwar Devi to repurchase the property in question on the payment of Rs. 36,000/- being made to the buyer i.e. the respondent, it was required to be treated that the transaction was the one of mortgage by conditional sale. According to him the suit for redemption of mortgage could be filed within 30 years as per Article 61 of the Limitation Act, the suit was filed within the prescribed period of limitation. Mr. Tiwari further submitted that if it was an absolute sale, the said Smt. Chandra Kunwar Devi would have delivered the title deeds of the property in question to the respondent and the respondent would also have got his name entered in the House Tax Department and other Departments of Government, but the same was not done by him. According to Mr. According to Mr. Tiwari, the earlier litigation between the respondent and Smt. Shugan Kanwar and Smt. Chandra Kunwar Devi did not involve the issue pertaining to the document in question Exhibit-2 as to whether it was a deed of outright sale or a deed of mortgage by conditional sale, and therefore the suit could not be treated as one barred by the principles of res judicata as alleged by the respondent. Mr. Tiwari has relied upon various judgments of Supreme Court in support of his submissions for treating the deed in question as the deed of mortgage by a conditional sale. 6. Per contra, the learned Senior Counsel Mr. S. Kasliwal for the respondent-defendant strenuously urged that the suit filed by the appellants-plaintiffs was not maintainable in the eye of law and was filed to misuse the process of law. According to Mr. Kasliwal, the document at Exhibit-2 was an absolute sale with an option to repurchase the disputed property and not the mortgage by the conditional sale, as there was no relationship of debtor and creditor existing between the parties; the ownership in respect of property had also stood vested in favour of the respondent, on the execution of the said document. Mr. Kasliwal further submitted that not only that the said Smt. Chandra Kunwar Devi did not take any action during her life time to repurchase the said property, she also did not participate or challenge the decree passed in the suit filed by the respondent against Smt. Shugan Kanwar and Smt. Chandra Kunwar Devi, seeking possession of the part of the suit property mortgaged with Smt. Shugan Kanwar by Smt. Chandra Kunwar Devi, in which suit the respondent had posed himself as the owner of the suit property. According to Mr. Kasliwal, the issue as to whether the respondent was the owner of the suit property or not having already been decided in the said suit, the said issue could not have been re-agitated by the appellants-plaintiffs in the present suit. According to Mr. Kasliwal, the issue as to whether the respondent was the owner of the suit property or not having already been decided in the said suit, the said issue could not have been re-agitated by the appellants-plaintiffs in the present suit. He also drew the attention of the Court to the will Exhibit-1 executed by the said Smt. Chandra Kunwar Devi in favour of the appellants, to submit that there was no reference of the suit property in the said will, which could be said to be bequeathed to the appellants, and therefore also the appellants-plaintiffs had no right to file the suit for redemption of the alleged mortgage. 7. Having considered the submissions made by the learned counsels for the parties and the evidence on record, the moot question that falls for consideration before this Court is, whether the document Exhibit-2 was a document of sale with an option to repurchase or the document creating mortgage by conditional sale. In this regard it would be beneficial to reproduce the relevant provisions contained in Transfer of Property Act with regard to the "sale" and "mortgage". Section 54 defines the "sale" as under:- "54. "Sale" defined.-"Sale is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. Sale how made.- Such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument. In the case of tangible immovable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property. Delivery of tangible immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property. Contact for sale.-A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties. Delivery of tangible immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property. Contact for sale.-A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself, create any interest in or charge on such property." As per Section 58 (a), A "mortgage" is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. Section 58(c) reads as under :- "(c) Mortgage by conditional sale.-Where, the mortgagor ostensibly sells the mortgaged property- on condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or on condition that on such payment being made the sale shall become void, or on condition that on such payment being made the buyer shall transfer the property to the seller, the transaction is called mortgage by conditional sale and the mortgagee a mortgagee by conditional sale: Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects purports to effect the sale." 8. The Supreme Court in various cases has considered the said provisions to deal with the issue whether the particular transaction was mortgaged by conditional sale or sale with an option to repurchase. In case of Raj Kishore (Dead) By LR's v. Prem Singh & Ors., (2011) 1 SCC 657 it has been held inter alia that for a transaction to constitute mortgage by conditional sale, it is necessary that one of the conditions mentioned in Section 58(c) should have been embodied in the documents that purports to effect the sale. In case of Uma Bai And Anr. v. Neelkanth Dhondiba Chavan (Dead) By LR's And Anr., (2005) 6 SCC 243 in paras 19 & 21 at 254 it has been held as under:- "19. It may be true that level of a document is not decisive. In case of Uma Bai And Anr. v. Neelkanth Dhondiba Chavan (Dead) By LR's And Anr., (2005) 6 SCC 243 in paras 19 & 21 at 254 it has been held as under:- "19. It may be true that level of a document is not decisive. The true nature of transaction must be determined having regard to the intention of the parties as well as the circumstances attributing thereto as also the wordings used in the document in question. 21. There exists a distinction between mortgage by conditional sale and a sale with a condition of repurchase. In a mortgage, the debt subsists and a right to redeem remains with the debtor; but a sale with a condition of repurchase is not a lending and borrowing arrangement. There does not exist any debt and no right to redeem is reserved thereby. An agreement to sell confers merely a personal right which can be enforced strictly according to the terms of the deed and at the time agreed upon. Proviso appended to Section 58(c), however, states that if the condition for re-transfer is not embodied in the document which effects or purports to effect a sale, the transaction will not be regarded as a mortgage. (See Pandit Chunchun Jha v. Sk. Ebadat Ali, Bhaskar Waman Joshi v. Narayan Rambilas Agarwal, K. Simrathmull v. S. Nanjalingiah Gowder, Mushir Mohammed Khan and Tamboli Ramanlal Motilal.) 9. The Apex Court in case of C. Cheriathan v. P. Narayanan Embranthiri, (2009) 2 SCC 673 in para 12 observed as under:- "12. A document, as is well known, must be read in its entirety. When character of a document is in question, although the heading thereof would not be conclusive, it plays a significant role. Intention of the parties must be gathered from the document itself but therefore circumstances attending thereto would also be relevant; particularly when the relationship between the parties is in question. For the said purpose, it is essential that all parts of the deed should be read in their entirety......." 10. Mr. Intention of the parties must be gathered from the document itself but therefore circumstances attending thereto would also be relevant; particularly when the relationship between the parties is in question. For the said purpose, it is essential that all parts of the deed should be read in their entirety......." 10. Mr. Tiwari learned counsel for the appellants has placed heavy reliance on the decision of Apex Court in case of P.L. Bapuswami v. N. Pattay Gounder, AIR 1966 SC 902 , in which it has been held in para 5 as under:- "5.......The definition of a mortgage by conditional sale postulates the creation by the transfer of a relation of mortgagor and mortgagee, the price being charged on the property conveyed. In a sale coupled with an agreement to reconvey there is no relation of debtor and creditor nor is the price charged upon the property conveyed, but the sale is subject to an obligation to re-transfer the property within the period specified. The distinction between the two transactions is the relationship of debtor and creditor and the transfer being a security for the debt. The form in which the deed is clothed is not decisive. The question in each case is one of determination of the real character of the transaction to be ascertained from the provisions of the document viewed in the light of surrounding circumstances. If the language is plain and unambiguous it must in the light of the evidence of surrounding circumstances be given its true legal effect. If there is ambiguity in the language employed, the intention may be ascertained from the contents of the deed with such extrinsic evidence as may by law be permitted to be adduced to show in what manner the language of the deed was related to existing facts......." 11. In view of the above stated legal position, let us examine the document dated 09.02.1966 at Exhibit-2 itself to decide as to whether the transaction was a mortgage by conditional sale as alleged by the appellants or a sale with an option to repurchase as contended by the respondent. As stated by the Apex Court, the Court is required to mainly consider the language used in the document, and the contents or the conditions mentioned in the document, in order to ascertain the true nature of the document. As stated by the Apex Court, the Court is required to mainly consider the language used in the document, and the contents or the conditions mentioned in the document, in order to ascertain the true nature of the document. Now, as can be seen from the document Exhibit-2, the late Smt. Chandra Kunwar Devi had sold out the entire suit property to the defendant for Rs. 36,000/- on various conditions inter alia that she had already received Rs. 17,000/- prior to the execution of the said document and Rs. 19,000/- in cash on the date of document. It was stated that the description of the property sold was given in Schedule 'k' annexed to the document. It was further stated that the possession of the hall (facing western side) was already handed over on 26.11.1966, and that the possession of part of remaining portion was with Smt. Shugan Kanwar, with whom the said portion was mortgaged and that the same shall be handed over to the respondent-defendant within three days therefrom. It was also stated that the entire property sold was free from any charge or encumbrance and was not mortgaged with anybody, and that the son of Smt. Chandra Kunwar Devi, Shri Keshav Ram Tiwari had also put his signature after reading and fully understanding the contents of the said sale deed. The appellants have emphasised much upon the condition No. 9 in which it has been stated that as agreed between the parties, if the party No. 1 i.e. Smt. Chandra Kunwar Devi desired to purchase the suit property from the party No. 2 i.e. the respondent within a period of two and half years, she could purchase the same for Rs. 36,000/- but in that case the party No. 1 shall bear all the expenses. As per condition No. 10, the respondent had become the absolute owner of the properties sold on the date of execution of the said deed. 12. Thus, from the bare reading of the said conditions contained in the document Exhibit-2, it clearly emerges that Smt. Chandra Kunwar Devi had sold out the property in question to the respondent for Rs. 36,000/- and had also handed over the possession of the same, except the part of property which was mortgaged with Shugan Kanwar, however the symbolic possession of the said portion was also handed over to the respondent. 36,000/- and had also handed over the possession of the same, except the part of property which was mortgaged with Shugan Kanwar, however the symbolic possession of the said portion was also handed over to the respondent. There was a transfer of ownership of immovable property for a price paid and the document was also got registered on that date, and therefore it was a sale within the meaning of Section 54 of the Transfer of Property Act. Considering the entire document Exhibit-2 in to, it clearly transpires that there was no intention whatsoever on the part of the parties to the document to create any mortgage in favour of the respondent. 13. At this juncture, it would be relevant to note that as per Section 58 of the Transfer of Property Act, a mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt or performance of an engagement which may give rise to a pecuniary liability. In the document Exhibit-2, there is no mention whatsoever that the transfer of interest in the property in question was for the purpose of securing payment of any money advanced or to be advanced by way of loan or for an existing or future debt. The only condition inserted in the said deed was that the said Chandra Kunwar Devi could repurchase the said property if she desired so within two and a half years for Rs. 36,000/-. Though it is true that as per Section 58(c) when the mortgagor ostensibly sells the mortgaged property on the condition that on a particular payment being made, the buyer shall transfer the property to the seller, it could be treated as mortgage by a conditional sale. However, in the instant case there was no debtor-creditor relationship existing between the parties prior to the transaction in question, nor did they intend to create such relationship by executing the document in question, and therefore the transaction could not be treated as the one being mortgage by conditional sale. It has to be construed as the sale with a right to purchase. 14. It has to be construed as the sale with a right to purchase. 14. It is further very much significant to note that not only the said Chandra Kunwar Devi had not exercised her right to repurchase the property in question within two and half years of the execution of the document, but even thereafter during her life time i.e. upto 13.11.1971, she had not exercised the said right. As rightly submitted by the learned counsel Mr. Kasliwal, there was also no mention in the will dated 06.10.1971 (Exhibit-1) relied upon by the appellants, about the suit property. Had there been any intention on the part of Chandra Kunwar Devi to create the mortgage by conditional sale in favour of the respondent, she would have definitely redeemed the mortgage by purchasing it back within two and half years or during her life time from the respondent or would have certainly mentioned about the said property in the will Exhibit-1 executed by her. 15. There is one more circumstance which goes against the appellants and in favour of the respondent, that is the decree at Exhibit-2 passed in civil suit No. 137/68 by the court in favour of the respondent and against the said Smt. Chandra Kunwar Devi and Smt. Shugan Kanwar. It appears that though it was mentioned in the deed Exhibit-2 that the possession of the part of property mortgaged with the said Shugan Kanwar shall be handed over to the respondent within three days of the execution of the sale deed, the possession was not handed over, and therefore the respondent had filed the said suit seeking possession of the said part of the suit premises, claiming himself to be the owner of the entire property. The said suit was not only not contested by the said Smt. Chandra Kunwar Devi, but she also did not choose to challenge the decree passed in the said suit in favour of the respondent before the higher forum. The respondent-defendant had also taken up the contention in the amended written statement in the instant case that in some part of the said premises, there were three tenants and the respondent had recovered the possession from the said tenants by filing the suits in the court of law. The said contention has also not been denied by the appellants either in the pleadings or by leading any evidence. 16. The said contention has also not been denied by the appellants either in the pleadings or by leading any evidence. 16. It was sought to be contended by the learned counsel Mr. S. Kasliwal for the respondent relying upon the decisions of the Apex Court in case of Saroja v. Chinnusamy (Dead) By LR's, (2007) 8 SCC 329 that the decree passed ex-parte would be as good and effective as a decree passed after contest and that such a decree would be binding on the person against whom the same was passed. As against that the learned counsel Mr. Tiwari had relied upon the decision of the Apex Court in case of Fida Hussain And Others v. Moradabad Development Authority And Anr., (2011) 12 SCC 615 , to submit that the principles of res judicata would apply only when the lis is between the parties and the issues involved had attained finality. According to Mr. Tiwari, the issue whether the document in question executed between Smt. Chandra Kunwar and the respondent was a mortgage by a conditional sale or a sale with an option to repurchase, was not the issue in the earlier suit filed by the respondent against Smt. Shugan Kanwar and Chandra Kunwar Devi, and therefore the present suit could not be said to be barred by principles of res judicata. Though it is true that the issue with regard to the nature of the document Exhibit-2, was not directly involved in the earlier suit as was involved in the instant suit, the issue whether the respondent had become the owner of the property in question by virtue of the registered deed dated 09.12.1966 (Exhibit-2), was involved in the earlier suit being No. 137/68 (the judgment of which as on record at Exhibit-A-2). The said issue was decided in favour of the respondent, who was the plaintiff in the said suit and the said issue had also attained finality, the same having not been challenged either by Smt. Chandra Kunwar Devi during her life time, or by the present appellants, after the death of Smt. Chandra Kunwar Devi. 17. The said issue was decided in favour of the respondent, who was the plaintiff in the said suit and the said issue had also attained finality, the same having not been challenged either by Smt. Chandra Kunwar Devi during her life time, or by the present appellants, after the death of Smt. Chandra Kunwar Devi. 17. It is also pertinent to note that the said Chandra Kunwar Devi had died on 13.11.1971 and the present suit was filed by the appellants-plaintiffs in January 1981, after about the 10 years of the death of Smt. Chandra Kunwar Devi, seeking redemption of mortgage on the ground that the document Exhibit-2 was not the document of absolute sale in favour of the respondent but was a mortgage by conditional sale. If the predecessor in title of the appellants, Smt. Chandra Kunwar Devi, had intended to create mortgage by conditional sale in favour of the respondent, she would have certainly challenged the title of the respondent in the earlier suit filed by the respondent against her and Smt. Shugan Kanwar. The case therefore would also be governed by the explanation IV to Section 11 which states that any matter which might or ought to have been made ground of defence or attack in such formal suit shall be deemed to have been a matter directly and substantially in issue in the subsequent suit. In that view of the matter, it is required to be held that the present suit filed by the appellants-plaintiffs raising the issue, which Smt. Chandra Kunwar Devi might or ought to have raised in the earlier suit, was barred by the principles of res judicata. 18. Thus in view of the above, apart from the contents of and the language used in the document Exhibit-2, from the attending circumstances also it was duly established by the respondent-defendant that the parties to the document Exhibit-2 never intended to create any mortgage, but the transaction in question was a sale with an option to repurchase the disputed property. The judgment and decree passed by the trial court dismissing the suit of the appellants-plaintiffs therefore deserves to be confirmed and is accordingly confirmed. 19. For the reasons stated above, the Court does not find any merits in the present appeal and the same is dismissed. Appeal dismissed.